The Commissioner of Police, as represented by the head of the Special Organised Crime Unit (SOCU) Sydney James, on Monday failed in a bid to secure the forfeiture of more than $7 million in local currency and millions more in foreign currencies that the police say they unearthed during a search of the home of a Berbice resident as part of a money laundering probe.
The application alleged that moneychanger Mohamed Jamalodeen Nazmodin, the respondent, had been engaged in the business of buying and selling foreign currency in breach of the Dealers in Foreign Currency (Licensing) Act.
Ruling on the application, High Court judge Navindra Singh noted, among other things, the state’s failure at establishing the offence of money laundering against Nazmodin, and the purported warrant being void. He also said he viewed the warrant as being “very suspicious,” given the manner in which it was obtained.
In the circumstances, Justice Singh ordered not only that all the currencies seized from Nazmodin be forthwith returned to him, but that interest at a rate of 6% per annum be paid in Guyana currency based on the value of all the currencies in Guyana dollars and calculated at the cambio exchange rates listed by Republic Bank (Guyana) Limited on April 15th, 2019 for the period from June 8th, 2017, until fully paid.
Additionally, the court awarded Nazmodin half a million dollars in court costs, which have to be borne by the state.
The police had been hoping to be granted the forfeiture order for the following sums seized from Nazmodin: GY$7,086,000; US$68,703; TT$1,741; SR$42,140; EC$26,205; €14,945; CDN$8,710; and £7,930.
SOCU had applied for the forfeiture order under Section 82 of the Anti-Money Laundering and Countering the Financing of Terrorism Act (AMLCFTA), which Nazmodin’s attorneys Christopher Ram and Christopher Thompson argued was improperly brought.
The lawyers contended, and the court agreed, that property which is capable of being the subject of a civil forfeiture order pursuant to that section of the AMLCFTA must be property that is already the subject of an order under either sections 80 or 81 of the Act.
The court further pointed out that the general phrases used in Part VII of the AMLCFTA to refer to property that are the proceeds of crime are “specified property” or “proceeds of crime” in accordance with Section 79 of the AMLCFTA.
The judge pointed out that Section 82 of the AMLCFTA makes reference to “the property,” which he said is clearly a reference to property described under Part VII of the AMLCFTA beginning with Section 79 of the AMLCFTA.
The court then reasoned that, in other words, “the property” referred to in Section 82 of the AMLCFTA is property described in Section 80 and/or Section 81 of the AMLCFTA.
To this end, the court said it found that the state’s application was improperly brought under Section 82.
As regards whether Nazmodin had committed the offence of money laundering in contravention of Section 3 of the AMLCFTA, the court found that he did not.
‘Not money laundering’
In its application, SOCU had alleged that Nazmodin had been engaged in the business of buying and selling foreign currency in breach of section 17 of the Dealers in Foreign Currency (Licensing) Act.
It had alleged further that the currencies seized from Nazmodin were obtained from his engagement in the serious offence of buying and selling foreign currency without a licence.
Outlining the law surrounding the offence of money laundering, the judge in his ruling noted that it involves the process of concealing the origins of money obtained from criminal conduct by disguising the original ownership and control of the proceeds to make such proceeds appear to have been derived from a legitimate source.
Against this background, he highlighted what he said are the three basic phases of offence: placement, that is, taking money (dirty money) that is derived from criminal activity, which is the predicate offence and introducing it in to a financial system or using it to purchase an asset which can later be sold with payment from legitimate sources; layering, which involves concealing the criminal origin of the proceeds (dirty money) such as selling the asset purchased during the placement phase; and integration, which involves introducing the “clean” money obtained during the layering phase into the economy such as depositing the money obtained in the layering phase.
Justice Singh said that a predicate offence is the offence which generated the criminal property being laundered.
He said that while under Sections 3(2) and (4) of the AMLCFTA, respectively, it is not necessary to prove which predicate offence was committed, or that any person was convicted of the predicate offence, the applicant must establish that the respondent managed proceeds (money/ currency in the current application) knowing or having reason to believe that such proceeds were the proceeds of crime in such a manner as to enable it to be characterised as legitimate funds (clean money).
In Nazmodin’s case, however, the judge said it appears as though SOCU was essentially saying that the predicate offence and the offence of money laundering was committed by the same act, that is, by the respondent engaging in the business of buying and selling foreign currency in breach of Section 17 of the Dealers in Foreign Currency Act, he also committed the offence of money laundering.
Justice Singh then reasoned that on this basis it would mean that the individual who steals a wallet by pickpocket would be guilty of money laundering once the proceeds of the crime (larceny contrary to section 66 of the Summary Jurisdiction (Offences) Act) are in his possession.
The judge said that in this light a great number of offences under the Summary Jurisdiction Act and some under the Criminal Law (Offences) Act should no longer be prosecuted since they can all be prosecuted as money laundering offences.
In Nazmodin’s case, Justice Singh said that at best the state may only be able to establish that he committed an offence against the Dealers in Foreign Currency (Licensing) Act, “but nothing more.”
Referencing SOCU’s admission that the file had been sent to the Director of Public Prosecutions for advise and the statutory time to institute a charge for that offence had passed by the time it was returned, the judge questioned whether that could have been the reason the state attempted to pursue a sanction under the AMLCFTA.
The court concluded that the offence of money laundering had not been established by the applicant against the respondent.
‘Improperly obtained’
The court next addressed a detention order which SOCU had been granted under Section 37 (5) of the AMLCFTA, by which it was able to seize the currency in the first place. That order was renewed several times.
The judge said that Section 37(5) of the AMLCFTA clearly deals with the detention of currency which is being “imported into or exported from Guyana.” Further, he noted that such orders could only be renewed on the basis that the currency detained will be produced before a court in proceedings against the person for an offence with which the currency is connected.
This, Justice Singh said, is clear in the wording of that section and made clearer on reading Section 37 (7) (b) of the AMLCFTA by which Section 37 (5) is subject.
In addition, the judge said it is undisputed that the application for the initial detention order and all of the applications made for renewal were obtained without notice to the respondent. Applications under this latter section, the judge said, “are not intended to be made without notice to the person who is alleged to be the owner of the currency seized.”
On this point, the court said it found that those detention orders were improperly obtained by the State.
Meanwhile, the judge said that the court on its own motion addressed the issuance of the search warrant, which Superintendent of Police Trevor Reid said he executed to search Nazmodin’s premises at which the currency was unearthed.
Justice Singh notes in his written ruling the court’s observation that the search warrant was issued by Justice of the Peace Ashoke Kumar, who resides on the East Bank of Demerara, for a search all the way in Berbice.
The judge said that while it is permissible for a Justice of the Peace to issue such a warrant under Section 18 (2) of the Summary Jurisdiction (Magistrates) Act, “it is indeed bewildering to the court” that Kumar, who resides on the East Bank of Demerara, more than 100 miles away from Nazmodin, who lives at No. 79 Village, Corriverton, Berbice, was sought to issue the warrant.
Justice Singh said this further concerned the court since there is a Magistrate’s Court at Corriverton, while noting the fact that Superintendent Reid would had to have passed several Magistrate’s Court travelling from Kumar’s residence on the East Bank of Demerara to the respondent’s residence in Corriverton.
The court said, too, that the information on oath exhibited as the document that led to the issuance of the warrant was not signed by Reid, though signed by Kumar. That information, the court said, is intituled in the “Georgetown Magisterial District’’ but declares that the oath was taken on 8th June 2017 in the Springlands Magistrate’s Court.
Noting that sections 28 and 29 of the AMLCFTA address the obtaining of warrants in matters falling under the AMLCFTA, Justice Singh said that certainly the procedure purportedly adopted by Superintendent Reid was not contemplated by the drafters of the Act.
Against this background, the judge said it had not been demonstrated to the court that the warrant was issued, if in fact issued, under the AMLCFTA in so far as the applicant had not satisfied the court that the conditions set out in the aforementioned sections were satisfied.
The court said it viewed the obtaining of the warrant in this case as “very suspicious,” while adding that there was insufficient information in the information on oath to substantiate the issue of the warrant under the AMLCFTA in the first place. “There must be strict and honest compliance with the provisions of the Act,” the judge said.
Justice Singh then surmised that the state, clearly realising the less than acceptable circumstances surrounding the obtaining of the warrant, attempted to justify the search by stating that Nazmodin consented to the search.
The judge said he found that the warrant was “unlawful, null and void and of no legal effect,” while noting that “since the AMLCFTA specifically requires a warrant to search premises, the search was unlawful and therefore anything said to be “unearthed’’ during the search cannot be used as evidence.”
In all the circumstances, the court denied the state its application for a civil forfeiture order.
